Decision details

To consider the report of the Deputy Leader and Cabinet Member for Growth seeking Cabinet approval of confidential terms relating to an Agreement for a new head-lease over the entire Leisure World site, to enable its comprehensive re-development

(i)  That the commercial and financial terms and related recommendations set out in confidential Appendix 2 be agreed.

(ii)  Following consultation with the Cabinet Member for Growth and Executive Director of Finance and Commercialisation, that the Executive Director of Place be given delegated authority to finalise the detailed terms of this transaction.

As freehold landowner, the Council wishes to see the strategically important Leisure World site (identified on the Plan at Appendix 4) regenerated for a mix of uses consistent with its ambitions for the Mayflower Quarter.

Delivering the desired outcomes will necessitate changes to existing tenure arrangements, including re-gearing of the current ground leases, to enable the proposed scheme to be funded by the developer.

Do Nothing – the proposed redevelopment (as approved in-principle by the Council’s Planning and Rights of Way Panel in March 2020) would not happen without the Council’s co-operation as Freehold landowner, so opportunities to achieve significant economic and other benefits would be lost.

Sell the Council’s interest – this would sub-optimise long-term returns, deny the Council substantive influence over redevelopment of this key site and risk a scheme coming forward which failed to deliver on key city vision objectives.

Council buy out head-lease and develop the site itself – quite apart from the lessee’s reluctance to sell, this would involve significant (unbudgeted) capital expenditure and substantial project resources that the Council does not have.

It is therefore considered preferable to work with a willing partner/investor using the Council’s influence as landowner and planning authority, to deliver a scheme consistent with its corporate and social priorities.